The U.S. Embassy in Berlin, where a top CIA official worked before being evicted Thursday amid cases of Germans’ spying for the United States and a yearlong spat over NSA surveillance, including eavesdropping on Chancellor Angela Merkel’s phone.

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German Chancellor Angela Merkel smiles during a joint news conference with the Prime Minister of Moldova Iurie Leanca as part of a meeting at the chancellery in Berlin, Germany, Thursday, July 10, 2014. (AP Photo/Michael Sohn)

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Spy case offers peek into 21st-century espionage

Article by: Alison Smale

New York Times

July 12, 2014 - 6:25 PM

BERLIN – The Cold War is long since over, Berlin is no longer the “small town in Germany” of John le Carré fame and few nations have exhibited a stronger reaction against the modern surveillance state.

Yet the past few weeks have brought new reminders that the spy game goes on in Germany, which remains caught geographically and historically between Russia and the West.

The espionage cases that have caused severe new strains between the United States and Germany grew, paradoxically, out of German concerns about renewed Russian intelligence activity. The two cases also appear to be linked to each other, at least tangentially.

The more troubling of the cases centers on a 31-year-old midlevel employee of the federal intelligence service who was arrested July 2. He was detained on suspicion of spying for Russia, but then astonished his interrogators by claiming to have passed 218 German intelligence documents to the United States.

That man, identified only as Markus R., first came on the radar of German counterintelligence on May 28, when he sent an e-mail to the Russian Consulate in Munich offering information, the newspaper Süddeutsche Zeitung reported on Saturday.

Since the Russian invasion of Crimea, senior German intelligence officials say, the Russians had stepped up their activity in Germany, seeking information on Berlin’s next steps, so counterintelligence was on alert for such contacts.

Markus R. was reportedly eager to impress the Russians and attached at least one intelligence document to his e-mail.

E-mail query alerted U.S.

German counterintelligence officials sought to ensnare Markus by replying to him from a false Russian e-mail address, suggesting a meeting. Markus apparently did not take the bait, and the Germans, casting about for more clues, forwarded the e-mail address used by Markus R. to the Americans, asking if they recognized it.

There was no reply, and Markus shut down the e-mail address.

His arrest and subsequent admission that he had actually been working for the United States infuriated the Germans and embarrassed the United States, especially given previous disclosures that the Americans had been eavesdropping on the communications of millions of Germans and had tapped the mobile phone of Chancellor Angela Merkel.

Markus R., according to German news media accounts citing unidentified government and intelligence officials, had been working already two years for the Americans, reportedly receiving $18,400 for those 218 documents.

He apparently arranged a meeting with the Russians for July 19, prompting counterintelligence to detain him — still thinking they were dealing with a spy for Moscow. But there was yet another twist in store. The anonymous denunciation of the German defense official that Markus had included in his e-mail to the Russians turned out to be at the heart of a separate case that German counterintelligence officials had been monitoring since August 2010, said Andre Hahn, a member of the parliamentary commission that oversees Germany’s intelligence services.

Last week, Germany demanded that the top U.S. intelligence official in Berlin leave the country.

Trying to repair damage

The two sides are now beginning to turn to the task of repairing their relationship.

The German foreign minister, Frank-Walter Steinmeier, will meet Secretary of State John Kerry on Sunday at a meeting on limiting Iran’s nuclear capability.

On Saturday, Merkel was asked in an interview about the U.S. relationship. “We have differing perceptions on the work of intelligence services, but other political areas … are absolutely in our interest.”

“We work very close together with the Americans. I want that to continue,” the chancellor said.